Naspers targets education for growth

Johannesburg - Naspers plans to expand in education

software as Africa’s biggest company by market value searches for a repeat of

the profitable bet it made on Tencent Holdings of China.

The owner of Africa’s biggest pay-TV service is seeking

to build on investments in U.S. education-technology companies Udemy and

Brainly that it made earlier this year, adding a new limb to a growth strategy

that has taken the Cape Town-based company into Indian online retail and

Russian social networks.

“We believe that, like how technology has transformed the

way people communicate, if you go ten years from now education will be

fundamentally transformed,” Chief Executive Bob Van Dijk said in a phone

interview on Friday. “People spend a tremendous amount of money and time on

education.”

Naspers has been scouring the world for a repeat of the

investment that made its name: the purchase of a $32 million stake in WeChat

creator Tencent in 2001, which is now worth about $78 billion. That helped

transform the business from a South African newspaper publisher into global

investor in technology companies, and Tencent’s contribution helped Naspers

increase earnings by 31 percent in the six months through September, the

company said earlier on Friday.

The e-commerce division also showed signs of strength,

with 23 businesses making a profit compared with 18 a year earlier. That helped

offset a decline at the TV unit, which was hurt by weaker sub-Saharan African

currencies against the dollar while subscribers switched to cheaper

competitors.

To read more about Africa’s biggest company, click here.

The shares rose 1.1 percent to R2 087.59  at the close

in Johannesburg on Friday, valuing the company at R916 billion  ($64.6

billion).

Naspers will consider disposing of businesses alongside

any purchases in education and other industries, Van Dijk said, citing the sale

of Polish online auction site Allegro to private equity firms for $3.25 billion

last month. The company has also agreed to combine Indian travel operation

Ibibo with US competitor MakeMyTrip, while Amazon.com Inc. is in talks

to acquire Dubai-based online retailer Souq.com FZ, in which Naspers owns a

stake, according to people familiar with the matter.

“We are critical of our portfolio and we want the right

assets on board,” the CEO said. “You can expect us to keep looking at our

assets that may well lead to further action.”

Naspers is committed to India, where its online retailer

Flipkart has been taking advantage of a rise in smartphone use. That’s even as

Seattle-based Amazon seeks to expand in the world’s second most populous

country.

India “can become one of the biggest online retail

markets in the world,” van Dijk said. “Amazon is a fierce competitor and we

never underestimate them. I think the strategic advantage that Flipkart has is

that it is run by Indian people for Indian people.”

Naspers’s education investments have all been in the US to date, and the company doesn’t see the administration of President-elect

Donald Trump as a setback to its growth plans even if he introduces more

protectionist policies.

The company’s US classifieds unit “is not a

cross-border business; it’s a domestic person-to-person trade business,” Van

Dijk said. “In theory if the country becomes more closed the business might

actually do better.”

 BLOOMBERG